Buildings insurance and house sale/purchase

jackieblack

My current buildings insurance is one of those online policies where you can't speak to a human and everything has to be done online.  I've tried the online chatbot but can't make it understand the question...  I'm hoping someone here might be able to help, please

I'm expecting to shortly exchange contracts on the sale of my current house and the purchase of a new one. I understand that I should get buildings insurance effective from the date contracts are exchanged, but presumably need to keep my current property insured until the sale has complete.

Obviously I'll need to tell my insurer (Aviva) that I'm moving, but there will be a period of overlap (probably about two weeks) when I need to have both properties insured... how does that work? Do I need to take out a new policy for the new house from the date of exchange? And then cancel the current one from the date of completion? Or will the insurer just take the details of the new house and cover both for the period between exchange and completion?

MyRealNameToo

jackieblack said:

My current buildings insurance is one of those online policies where you can't speak to a human and everything has to be done online.  I've trued the online chatbot but can't make it understand the question...  I' hoping someone here might be able to help, please

I'm expecting to shortly exchange contracts on the sale of my current house and the purchase of a new one. I understand that I should get buildings insurance effective from the date contracts are exchanged, but presumably need to keep my current property insured until the sale has completed which means 
Obviously I'll need to tell my insurer (Aviva) that I'm moving, but there will be a period of overlap (probably about two weeks) when I need to have both properties insured... how does that work? Do I need to take out a new policy for the new house from the date of exchange? And then cancel the current one from the date of completion? Or will the insurer just take the details of the new house and cover both for the period between exchange and completion?

Which variant of Aviva's online only offering do you have? 

The most prudent thing is to buy at exchange on the new property and cancel on sale of the old property.  Some insurers will consider temporarily covering both under the one policy for a short time whilst the sales processes occur but that may be difficult with an insurer you can't talk to. 

When we were previously in the situation we bought a budget policy on the house we were buying paying note to cancellation fees and then on completion we cancelled the new policy and transferred the old one to the new property. It worked out cheaper for us as we are very limited on who will sell us content insurance for a sensible price. 

Mark_d

I don't understand why you want cover for you new house from the point of exchange.  During the period between exchange and completion, the house does not belong to you... so would an insurance in your name even be valid?

If the new house burnt down in the period between exchange and completion - do you think both the seller and the buyer should insure the property?  Should you both get payouts if it burns down?

jackieblack

Mark_d said:

I don't understand why you want cover for you new house from the point of exchange.  During the period between exchange and completion, the house does not belong to you... so would an insurance in your name even be valid?

If the new house burnt down in the period between exchange and completion - do you think both the seller and the buyer should insure the property?  Should you both get payouts if it burns down?

Because the solicitor advised that we need to
Because from exchange of contracts we're legally committed to complete the purchase and who knows if the seller even has valid insurance and even if they do they could cancel it

I've always been advised to take insurance from exchange with every house I've bought, I've just never sold and bought at the same time before so this query has never previously arisen

jackieblack

MyRealNameToo said:

jackieblack said:

My current buildings insurance is one of those online policies where you can't speak to a human and everything has to be done online.  I've trued the online chatbot but can't make it understand the question...  I' hoping someone here might be able to help, please

I'm expecting to shortly exchange contracts on the sale of my current house and the purchase of a new one. I understand that I should get buildings insurance effective from the date contracts are exchanged, but presumably need to keep my current property insured until the sale has completed which means 
Obviously I'll need to tell my insurer (Aviva) that I'm moving, but there will be a period of overlap (probably about two weeks) when I need to have both properties insured... how does that work? Do I need to take out a new policy for the new house from the date of exchange? And then cancel the current one from the date of completion? Or will the insurer just take the details of the new house and cover both for the period between exchange and completion?

Which variant of Aviva's online only offering do you have?

The most prudent thing is to buy at exchange on the new property and cancel on sale of the old property.  Some insurers will consider temporarily covering both under the one policy for a short time whilst the sales processes occur but that may be difficult with an insurer you can't talk to. 

When we were previously in the situation we bought a budget policy on the house we were buying paying note to cancellation fees and then on completion we cancelled the new policy and transferred the old one to the new property. It worked out cheaper for us as we are very limited on who will sell us content insurance for a sensible price. 

 It appears to just be called Aviva Online 

Thank you

Mark_d

jackieblack said:

Mark_d said:

I don't understand why you want cover for you new house from the point of exchange.  During the period between exchange and completion, the house does not belong to you... so would an insurance in your name even be valid?

If the new house burnt down in the period between exchange and completion - do you think both the seller and the buyer should insure the property?  Should you both get payouts if it burns down?

Because the solicitor advised that we need to
Because from exchange of contracts we're legally committed to complete the purchase and who knows if the seller even has valid insurance and even if they do they could cancel it

I've always been advised to take insurance from exchange with every house I've bought, I've just never sold and bought at the same time before so this query has never previously arisen

We're currently in the fifth property we've owned.  I've never been asked to have two insurance policies.  I just swap my insurance over on the day of completion.

At exchange, an amount of usually 10% becomes payable if you do not complete.  However, if the house burns down in that time, no-one can hold you liable for the loss.  Your mortgage only starts from the point of completion...so the seller is still the owner.

Until completion, only the seller has keys to the property.  If they severely damage the property, who's responsibility is it to make it right?

jim1999

Mark_d said:

jackieblack said:

Mark_d said:

I don't understand why you want cover for you new house from the point of exchange.  During the period between exchange and completion, the house does not belong to you... so would an insurance in your name even be valid?

If the new house burnt down in the period between exchange and completion - do you think both the seller and the buyer should insure the property?  Should you both get payouts if it burns down?

Because the solicitor advised that we need to
Because from exchange of contracts we're legally committed to complete the purchase and who knows if the seller even has valid insurance and even if they do they could cancel it

I've always been advised to take insurance from exchange with every house I've bought, I've just never sold and bought at the same time before so this query has never previously arisen

We're currently in the fifth property we've owned.  I've never been asked to have two insurance policies.  I just swap my insurance over on the day of completion.

At exchange, an amount of usually 10% becomes payable if you do not complete.  However, if the house burns down in that time, no-one can hold you liable for the loss.  Your mortgage only starts from the point of completion...so the seller is still the owner.

Until completion, only the seller has keys to the property.  If they severely damage the property, who's responsibility is it to make it right?

https://forums.moneysavingexpert.com/discussion/6422063/warning-insurance-from-exchange-of-contracts

MyRealNameToo

Mark_d said:

I don't understand why you want cover for you new house from the point of exchange.  During the period between exchange and completion, the house does not belong to you... so would an insurance in your name even be valid?

If the new house burnt down in the period between exchange and completion - do you think both the seller and the buyer should insure the property?  Should you both get payouts if it burns down?

You are legally obliged to complete the purchase irrespective of if the house is still standing as it was or now a smouldering pile of burnt bricks. The question is if the seller has any insurable interest given they are going to get the £300k no matter what state its in however many policies have explicit terms about insurance during the period between exchange and completion. 

The contract at exchange typically doesnt require the seller to maintain insurance however I believe there is a variant of the standard terms that does but its not often used. 

It's prudent for the seller to keep their insurance in place as whilst the buyer is obliged to complete the reality of getting £300k for some burnt bricks is another matter. 

Obviously both can't claim but both having insurance is the most prudent approach. 

XRS200

I'm pretty sure my home policy automatically covers the buyer between exchange and completion 

MyRealNameToo

XRS200 said:

I'm pretty sure my home policy automatically covers the buyer between exchange and completion 

Its not an uncommon feature but the buyer needs a lot of trust in you to not cancel it, not have made a false declaration when you bought the policy etc as they have a financial commitment irrespective of if your insurance is there and valid or not. 

eddddy

Almost all house sales use "The Standard Conditions of Sale - 5th Edition".

Those conditions state that the buyer is responsible for insurance between exchange and completion.

(The older 4th Edition stated that the seller was responsible for insurance. @Mark_d - maybe you haven't bought/sold since the 5th Edition was introduced.)


In theory, the seller doesn't need to insure the house they are selling between exchange and completion, because it's the buyer's responsibility to insure...

...but most solicitors recommend that the seller continues to insure, just in case the buyer "messes-up" and doesn't arrange the correct insurance.


So the bottom line is: you should probably be insuring both properties between exchange and completion.